Concept · The RiskModels engine (ERM3)
Replication equation
The raw-ETF identity that reproduces a stock's return from its hedge legs — only tradeable ETF returns, no orthogonalization at trade time. Verified to ±0.1% for every stock, every date.
In depth
Reproduces a stock's return from its hedge legs using only raw, tradeable ETF returns — no orthogonalization needed at trade time. Verified to ±0.1% for every stock on every date.
Compute it with the API
POST /api/decompose
# pip install riskmodels-py
client.decompose("NVDA") # returns hedge legsIn the methodology
Putting it together: the replication equation →Referenced by (0)
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